FAA halts production expansion, approves inspection instructions

The Federal Aviation Administration on Wednesday stopped boeingplanned expansion of its 737 Max aircraft production, but cleared the way for the manufacturer's Max 9 to return to service nearly three weeks after a door plug exploded during a Alaska Airlines flight.

“Let me be clear: This will not be a return to normal for Boeing,” FAA Administrator Mike Whitaker said in a statement Wednesday. “We will not accept any request from Boeing for a production expansion or approve additional production lines for the 737 MAX until we are satisfied that the quality control issues discovered during this process are resolved.”

Boeing had no immediate comment. Its shares fell about 4% in after-hours trading after the FAA announcement.

Boeing has been struggling to ramp up production of its best-selling plane as airlines clamor for new planes in the wake of the Covid-19 pandemic.

The FAA also said Wednesday that it approved inspection instructions for the Max 9 aircraft. Airlines had been waiting for that approval to review their fleets and return those planes to service.

The FAA grounded the 737 Max 9 planes after a fuselage panel exploded as Flight 1282 took off from Portland, Oregon, on Jan. 5. united airlines and Alaska Airlines, the two U.S. airlines with the planes, canceled hundreds of flights.

The CEOs of United and Alaska have expressed frustration with Boeing after the problem, the most serious in a recent series of apparent manufacturing failures on Boeing planes. The plane for the Alaska flight was delivered late last year.

The FAA is investigating Boeing's production lines after the flight to Alaska. Whitaker told CNBC on Tuesday that the FAA will keep “boots on the ground” at the Boeing factory until the agency is satisfied that quality control systems are working. He said the agency is shifting to a “direct inspection” approach with Boeing.

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